Positive News for the Academy - Wasps pull out of Higgs

oucho

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Anyway you cut it, £1.3m pa was extortionate.
It really wasn't, Stu. No private investor would have touched such terms, which actually shows how soft/lenient the offer from the council was. Even now I'm not sure how it wasn't defined as illegal state aid.

In any case, that level of rent wasn't dreamed up. It was set at that level to cover the £31m the council had to put up, including the bank's interest charges over the 50 years, allowance for bad debt, and so on.

Unless you think that the council should have given CCFC the £31m, or any fraction of that, as a free gift with no strings attached, I do not see how anyone could find this unreasonable.
 
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CCFC54321

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When are going to actually see the financial results for Wasps? There’s no doubt in my mind that there in shit street and no way to pay back the bond holders.

They play Leicester soon I’m told and will be hoping for a big payday? Was interesting to hear the gate for that fixtures attendance has gone down over the last three fixtures however I’ve no way to support what I was told.
 

stupot07

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It really wasn't, Stu. No private investor would have touched such terms, which actually shows how soft/lenient the offer from the council was. Even now I'm not sure how it wasn't defined as illegal state aid.
You're suggesting the ccfc £1.3m rent wasnt extortionate and was that good it was illegal state aid?


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oucho

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The ccfc £1.3m rent was illegal state aid? And wasn't extortionate?
I could repeat my post above but there's no point if you didn't understand it first time.

The definition of state aid is offering private entities (CCFC) more favourable terms than any available from the commercial / private sector. No bank or financial institution would touch us given the state of our books at the time. No doubt CCFC/CCC did some clever paperwork at the time to find a loophole, but notwithstanding that, then yes by definition the council bailing the club out was state aid.

How can something be extortionate if it's the best offer available in the market, and is based on the lender's outlay and own interest charges and other costs?

Since when was it extortion to demand a fair return in exchange for an investment (rather than giving a free gift) as CCC did in this case?

There was no justification for tearing up the lease. None. They should have continued to pay the rent whilst negotiating in good faith until such time as reduced rent would have been agreed, probably back-dating the rent reduction to May 2012. SISU's actions were unforgivable, as ably and lucidly demonstrated by Justice Heckingbothom in JR1, which was upheld by the Court of Appeal and the Supreme Court.
 
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stupot07

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I could repeat my post above but there's no point if you didn't understand it first time.

The definition of state aid is offering private entities (CCFC) more favourable terms than any available from the commercial / private sector. No bank or financial institution would touch us given the state of our books at the time. No doubt CCFC/CCC did some clever paperwork at the time to find a loophole, but notwithstanding that, then yes by definition the council bailing the club out was state aid.

How can something be extortionate if it's the best offer available in the market, and is based on the lender's outlay and own interest charges and other costs?

Since when was it extortion to demand a fair return in exchange for an investment (rather than giving a free gift) as CCC did in this case?

There was no justification for tearing up the lease. None. They should have continued to pay the rent whilst negotiating in good faith until such time as reduced rent would have been agreed, probably back-dating the rent reduction to May 2012. SISU's actions were unforgivable, as ably and lucidly demonstrated by Justice Heckingbothom in JR1, which was upheld by the Court of Appeal and the Supreme Court.
Sorry oucho, but the state aid suggestion is total bolderdash as is the assertion that is you only have one of something is can't be extortionate.




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Hobo

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When are going to actually see the financial results for Wasps? There’s no doubt in my mind that there in shit street and no way to pay back the bond holders.

They play Leicester soon I’m told and will be hoping for a big payday? Was interesting to hear the gate for that fixtures attendance has gone down over the last three fixtures however I’ve no way to support what I was told.
December I think they are submitting their accounts.
 

oucho

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Sorry oucho, but the state aid suggestion is total bolderdash as is the assertion that is you only have one of something is can't be extortionate.




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The only one making assertions is you. I have explained my point of view. All you've done is throw around accusations. You didn't address any of the points I made.
 

Captain Dart

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Oct 26, 2013
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Yes. There was no duress, it was a fair agreement then and the club entered into it willingly.
Not only that but the lease situation only arose because the club screwed up finances on the original project and the council financed its completion.
In hindsight they should have let the club manage the situation on their own, as I hope they will do with Wasps if they've got themselves in financial trouble.
 
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ccfcchris

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It's probably me but I'm struggling to find a link for wasps attendaces. Would be grateful if someone could post a link.
 

Captain Dart

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Payback? Didn't the lease cost wasps a million for 200 years?
I do find the extension too cheap but the cost was £20M for the first 46 odd years, which wasn't cheap considering they bought an enterprise that makes a loss (or a very small profit).
 

Captain Dart

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torchomatic

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Yes. There was no duress, it was a fair agreement then and the club entered into it willingly.
Within three months of the first match at the Ricoh the club tried to renegotiate the rental deal. ACL refused. So, you're talking bollocks; it was never a fair deal, the club had no choice.
 

ccfchoi87

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It's probably me but I'm struggling to find a link for wasps attendaces. Would be grateful if someone could post a link.
Sometimes they tweet or you can go on bbc website. They're usually inflated as the pictures they tweet show how empty the ground really is. Last home game they got 7000 I think and I'm sure someone mentioned 4000 tickets were given out for rememberance weekend. I'm yet to meet anyone who has paid to go
 

stupot07

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The only one making assertions is you. I have explained my point of view. All you've done is throw around accusations. You didn't address any of the points I made.
- the council didn't lend ccfc any money to finish the build. In fact they totally took over the build, then wholly owning the freehold spending IIRC £21m of their own money.
- they then set up ACL with Higgs, took out a £21m loan in which they immediately paid themselves back. This mean't that not only did they own the freehold they also 50% owned the leasehold. The £21m payment ensured there the council were not out of pocket.
- they then rented it to the club for £1.3m, which equated to an office or 2, a shop and literally 23-26 day use of the stadium in which the club didnt benefit from a range of matchday incomes, including not a penny of the Ricoh sponsorship of which the club was the major draw for.
- at no point have the club owned or benefited from ACL other than renting space to work from, at which pretty much everyone except you agree was extortionate and unsustainable amount of money.
- in fact the rental agreement was an annual unaffordable liability not an asset on the balance sheet
- so with the relationship as a tenant / landlord, with the club owning nothing, gaining little money from being there outside football operations, the council wholly owning the freehold and 50% owning the leasehold, with the rent being a liability to the clubs finances (£65m over 50 years), they is clearly not state aid.

no when you then go to consider wasps - selling it cheaply, letting them pay back the loan, selling them 200 year extension to the leasehold that was less than an annual ccfc rental payment, allowing them to raise bonds against it that went to pay their owner back.....then yeah looks like state aid to me.
 

oucho

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Within three months of the first match at the Ricoh the club tried to renegotiate the rental deal. ACL refused. So, you're talking bollocks; it was never a fair deal, the club had no choice.
I'd have refused a renegotiation after 3 months of a 50 year lease, too quite rightly. However, when the club stopped paying the rent in 2012, there is no question that the council could have entertained rent negotiations, as it was clear the club was failing (all its own fault). But Timmy just stopped paying the rent and poisoned relations; it was both tactically inept and profoundly morally wrong.

You seem to imply there was some justification in the club trying to bankrupt ACL and break the lease. That's not true - you're talking bollocks.
 
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oucho

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- the council didn't lend ccfc any money to finish the build. In fact they totally took over the build, then wholly owning the freehold spending IIRC £21m of their own money. I didn't imply the council owned CCFC the money - the council had to take out a loan of millions to help fund the project. Taking over ownership of the ground was reasonable in the circumstances (and very wise, at it turned out)
- they then set up ACL with Higgs, took out a £21m loan in which they immediately paid themselves back. This mean't that not only did they own the freehold they also 50% owned the leasehold. The £21m payment ensured there the council were not out of pocket. Except the Yorkshire Bank mortgage still had to be repaid and the cost of spending the money had to be recovered from CCFC's operation of the Ricoh.....
- they then rented it to the club for £1.3m, which equated to an office or 2, a shop and literally 23-26 day use of the stadium in which the club didnt benefit from a range of matchday incomes, including not a penny of the Ricoh sponsorship of which the club was the major draw for. Again, you ignore a) no better terms were available elsewhere, and b) the council had to charge this sort of money to cover the cost in the first place
- at no point have the club owned or benefited from ACL other than renting space to work from, at which pretty much everyone except you agree was extortionate and unsustainable amount of money. The club voluntarily sold up when they ran out of money - they weren't entitled to the stadium by birthright. You have to pay your way and CCFC paid the price for not being able to do so.
- in fact the rental agreement was an annual unaffordable liability not an asset on the balance sheet - it became unaffordable because of the ongoing financial mismanagement of CCFC which led to struggles on the pitch and inevitable relegation. Also do not forget that the council offered a variable level of rent based on league status with CCFC refused.
- so with the relationship as a tenant / landlord, with the club owning nothing, gaining little money from being there outside football operations, the council wholly owning the freehold and 50% owning the leasehold, with the rent being a liability to the clubs finances (£65m over 50 years), they is clearly not state aid. Not true - if you are correct that this wasn't state aid, you have to show that a private bidder would have offered a more favourable deal. Those who were interested ran a mile when they saw the finances.

no when you then go to consider wasps - selling it cheaply, letting them pay back the loan, selling them 200 year extension to the leasehold that was less than an annual ccfc rental payment, allowing them to raise bonds against it that went to pay their owner back.....then yeah looks like state aid to me. Wasps offer to CCC for the Ricoh was more favourable than SISU's so the council had a statutory duty to accept it. I suggest you acquaint yourself with the judicial review 2 for more info on that one.
Comments above. You have always seemed to me from your posting history as a decent bloke but you don't have a leg to stand on, on this one.
 

RocketSkates

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Wasps running out of money? Maybe a move back to the capital more financially viable? I can dream
 

CCFC54321

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It's probably me but I'm struggling to find a link for wasps attendaces. Would be grateful if someone could post a link.
There hard to find (probably as nobody can’t be bothered to put them up + no interest in them) but remember if you do find them take approx 20% off the gate as they will be free tickets/under 10’s free. That’ll give you the real paying customer.
 

Hobo

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He said development around the Arena. The council has always, for whatever reason, put this expectation on any would-be owner of the Arena.
They have submitted nothing of the sort. No planning applications, no outline planning applications. No plans at all, just hot air that the drips at the council fell for.
Perhaps my "development of the site" is loose language making you think in terms of bricks and mortar. But of course the site can also be developed commercially through a business plan, intention and a road map.

I think the quote I was referring to was more like "no viable plan"....unfortunately I have been unable to locate it. But to me it illustrated how the council lost trust in SISU and were left to second guess their true intention around the Ricoh. Unfortunately our owners have done nothing since that breeds confidence their intentions.
 

Hobo

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There hard to find (probably as nobody can’t be bothered to put them up + no interest in them) but remember if you do find them take approx 20% off the gate as they will be free tickets/under 10’s free. That’ll give you the real paying customer.
Free tickets? Not many this year from what I have heard.
 

Grendel

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Free tickets? Not many this year from what I have heard.
They had 4,000 in one match, 35% price reductions for Saracans and Leicester from one source and 25% from another - a massively reduced half season ticket deal -.£300 for two adults and two children

You seem keen to stick up for them though.
 

CCFC54321

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Free tickets? Not many this year from what I have heard.
They advertise u10’s free. I’ve actually witnessed a guy trying to give away a batch of free tickets to a Sunday Wasps match last year.
 

chiefdave

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Hobo

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They had 4,000 in one match, 35% price reductions for Saracans and Leicester from one source and 25% from another - a massively reduced half season ticket deal -.£300 for two adults and two children

You seem keen to stick up for them though.
How is saying not many free tickets this season from what I have heard is sticking up for them? Then you quote price reductions as a counter argument?

My information is the basic ticket price has gone up from £20 to £30 this season.

The attendances have been well down this season. You are laughable if you think that is sticking up for them, I am totally indifferent to them.
 

Hobo

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a massively reduced half season ticket deal -.£300 for two adults and two children
Half a season is about 6 home games. So £300, that is £25 per adult per game and standard practice with rugby under 16 go free. Massively reduced seems an exaggeration!

Nick says he pays £13 a game for city?
 

Grendel

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Half a season is about 6 home games. So £300, that is £25 per adult per game and standard practice with rugby under 16 go free. Massively reduced seems an exaggeration!

Nick says he pays £13 a game for city?
Nope it’s 9 home games and and advertised as a 25% reduction - it’s £50’more than the coventry rugby club offer which is 3rd division rugby.

As I say - you seem frantic to defend them
 

Ian1779

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- the council didn't lend ccfc any money to finish the build. In fact they totally took over the build, then wholly owning the freehold spending IIRC £21m of their own money.
- they then set up ACL with Higgs, took out a £21m loan in which they immediately paid themselves back. This mean't that not only did they own the freehold they also 50% owned the leasehold. The £21m payment ensured there the council were not out of pocket.
- they then rented it to the club for £1.3m, which equated to an office or 2, a shop and literally 23-26 day use of the stadium in which the club didnt benefit from a range of matchday incomes, including not a penny of the Ricoh sponsorship of which the club was the major draw for.
- at no point have the club owned or benefited from ACL other than renting space to work from, at which pretty much everyone except you agree was extortionate and unsustainable amount of money.
- in fact the rental agreement was an annual unaffordable liability not an asset on the balance sheet
- so with the relationship as a tenant / landlord, with the club owning nothing, gaining little money from being there outside football operations, the council wholly owning the freehold and 50% owning the leasehold, with the rent being a liability to the clubs finances (£65m over 50 years), they is clearly not state aid.

no when you then go to consider wasps - selling it cheaply, letting them pay back the loan, selling them 200 year extension to the leasehold that was less than an annual ccfc rental payment, allowing them to raise bonds against it that went to pay their owner back.....then yeah looks like state aid to me.
65 million in rent and not a single percent ownership of the stadium to show for it.

It was like the worst fucking Radio Rentals deal ever....
 
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duffer

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She made that statement before SISU tried to bankrupt Wasps through spurious legal action. Any reasonable person would agree that CCFC being allowed to stay at the Ricoh would be conditional on CCFC/SISU behaving reasonably, which they have demonstrably not done. Wasps aren't obliged to provide a home for CCFC, nor are the council ESPECIALLY when SISU are trying to destabilise them.
At the risk of getting drawn into a very old argument here, there are a few points that you're clearly overlooking.

The first one is that the Council told a huge lie right at the start of selling to Wasps. It's well documented, and it's along the lines of 'we need to build trust before talking about the ownership of the arena'. If only that had been tried - within a couple of weeks of that claim, ACL had been sold.

The next thing that you've claimed that simply isn't true is that the club had the opportunity to buy ACL under the same terms as it was offered to Wasps. That's a complete fiction - the deal was done in secret with Wasps and it was quite clearly a fait accompli well before the club had a chance to challenge it. (In this it is similar to the council's behaviour when bailing out ACL and pressurising the CET into witholding the story to prevent legal challenge). Again these are matters of record - the club was never offered the arena on anything like similar terms to those offered to Wasps, most notably in the case of the remarkably low lease extension price.

Then there's the next big lie - made time and time and time again at the council meeting when the deal was signed off - that selling to Wasps won't be allowed to hurt either CCFC or CRFC.

Again, this has been shown to be completely untrue. The only protection for CCFC was the existing contract to play at the Arena when Wasps took over. No other legal caveat was put into place to protect the club, though as you'll presumably know, as the leaseholder the council could have written something into the agreement to legally commit Wasps into keeping the club at the Ricoh. Without something laid out contractually, the council's claim to want to protect the club was all hot air. Ditto with Wasps avoiding playing on the days when CRFC played. It was a complete pretence, the council took no real action to protect either CRFC or CCFC.

So if you're trying to make a case here that the Council have been fair and honest and open all of the way through this process, then I think it can be shown above that it is simply not true. No amount of crap from SISU makes that right in my eyes. We know what SISU are like, but we're entitled to expect honesty from our elected representatives and their officers.

The key to this is exactly the point Torchy makes again and again. We all know that SISU have damaged the club massively, but it's the deal with Wasps that is the one thing that can't be unwound. The final nail in the coffin, if you like.

To come back to the original point of the thread, that's one of the reasons why some of us here are perhaps hoping that Wasps might be in trouble. It may be our only hope of ever getting our hands back on the stadium - indeed it might be the only way that the club actually stays in Coventry.
 
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Skyblueweeman

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Skyblueweeman

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So when a tenant moves into a property the landlord paints and decorates it to suit the tennent, well as a landlord that' news to me.
They normally get one neutral colour throughout, any changes come from the tennnt and then have to be returned to original state before vacating it.
its like When a shop rents a unit it is up to them to do the decor in their prefured style.
Maybe my analogy wasn’t the best but my main point stands. It’s run on a Franchised agreement and Hilton won’t pay money for refurbs on properties owned by other management groups.

Ownership groups will refurb (meeting Hilton Worldwide brand standards) and then utilise Hilton sales to try and get RoI.


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letsallsingtogether

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Maybe my analogy wasn’t the best but my main point stands. It’s run on a Franchised agreement and Hilton won’t pay money for refurbs on properties owned by other management groups.

Ownership groups will refurb (meeting Hilton Worldwide brand standards) and then utilise Hilton sales to try and get RoI.


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In other words they paid for it.
If there is a problem with the main structure of the building or if something broken that is not the tenants fault then yes the landlord will repair it.
It is like if seats are broken at a CCFC match then the club has to pay, if however it is deemed that it is down to wear and tear then the wasps would have to cough up the money.
Wasps may have initially spent some money sprucing it up, wouldn't have thought it would have been a great deal though nothing much has changed, Haven't spent a penny on the Arena by the looks of it bar a few club badges.....